Saudi Arabia has plans to privatize construction and management of school buildings and has hired HSBC as financial advisor for the privatization.

The state-owned firm affiliated with the Ministry of Education, Tatweer Buildings Co, aims to begin offering public-private partnerships for educational buildings this year. International law firm King & Spalding will act as legal advisor. The projects will be worth more than SAR45 billion (US$12 billion).

Five models will be proposed for the partnerships, including 15- to 20-year lease-leaseback contracts for buildings and 20- to 30-year BOT (Build-Maintain-Transfer) arrangements for public school construction. It will also transform urban facilities into mixed-use spaces, make unused public education buildings available for private schools as well as providing incentives for private school development in planned communities.

By 2020, authorities hope to increase the percentage of students in non-government higher education from 6% to 15%. In a country where public education is provided cost-free this is a major cost-cutting initiative.

Saudi Arabia said last year in economic reform plans, it would seek ways for investors to deliver services currently provided by the government, listing health care and education as vital sectors for investment. The plan budgeted SAR11 million (US$2.93 million) to encourage the private sector to invest in public education and SAR240 million (US$64 million) to attract private investment to finance school construction.